Short-term Borrowings and Long-term Debt
Inventory Financing. NGD currently has AMAs associated with its utility distribution service in Arkansas, north Louisiana and Oklahoma that extend through 2020. Pursuant to the provisions of the agreements, NGD sells natural gas and agrees to repurchase an equivalent amount of natural gas during the winter heating seasons at the same cost, plus a financing charge. These transactions are accounted for as an inventory financing and had an associated principal obligation of $24 million and $35 million as of June 30, 2017 and December 31, 2016, respectively.
Debt Retirements. In February 2017, CenterPoint Energy retired $250 million aggregate principal amount of its 5.95% senior notes at their maturity. The retirement of senior notes was financed by the issuance of commercial paper.
Debt Issuances. During the six months ended June 30, 2017, Houston Electric issued the following general mortgage bonds:
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| | | | | | | | |
Issuance Date | | Aggregate Principal Amount | | Interest Rate | | Maturity Date |
| | (in millions) | | | | |
January 2017 | | $ | 300 |
| | 3.00% | | 2027 |
The proceeds from the issuance of these bonds were used to repay short-term debt and for general limited liability company purposes.
Credit Facilities. In June 2017, CenterPoint Energy, Houston Electric and CERC Corp. each entered into amendments to their respective revolving credit facilities to extend the termination date thereof from March 3, 2021 to March 3, 2022 and to terminate the swingline loan subfacility thereunder. The amendments to the CenterPoint Energy and CERC Corp. revolving credit facilities also increased the aggregate commitments by $100 million and $300 million, respectively, to $1.7 billion and $900 million under their respective revolving credit facilities. No changes were made to the aggregate commitments under the Houston Electric revolving credit facility. In connection with the amendments to increase the aggregate commitments under their respective revolving credit facilities, CenterPoint Energy and CERC Corp. each increased the size of their respective commercial paper programs to permit the issuance of commercial paper notes in an aggregate principal amount not to exceed $1.7 billion and $900 million, respectively, at any time outstanding.
As of June 30, 2017 and December 31, 2016, CenterPoint Energy, Houston Electric and CERC Corp. had the following revolving credit facilities and utilization of such facilities:
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| June 30, 2017 | | December 31, 2016 | |
| Size of Facility | | Loans | | Letters of Credit | | Commercial Paper | | Size of Facility | | Loans | | Letters of Credit | | Commercial Paper | |
| (in millions) | |
CenterPoint Energy | $ | 1,700 |
| | $ | — |
| | $ | 6 |
| | $ | 970 |
| (1) | $ | 1,600 |
| | $ | — |
| | $ | 6 |
| | $ | 835 |
| (1) |
Houston Electric | 300 |
| | — |
| | 4 |
| | — |
| | 300 |
| | — |
| | 4 |
| | — |
| |
CERC Corp. | 900 |
| | — |
| | — |
| | 718 |
| (2) | 600 |
| | — |
| | 4 |
| | 569 |
| (2) |
Total | $ | 2,900 |
| | $ | — |
| | $ | 10 |
| | $ | 1,688 |
| | $ | 2,500 |
| | $ | — |
| | $ | 14 |
| | $ | 1,404 |
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| |
(1) | Weighted average interest rate was 1.42% and 1.04% as of June 30, 2017 and December 31, 2016, respectively. |
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(2) | Weighted average interest rate was 1.41% and 1.03% as of June 30, 2017 and December 31, 2016, respectively. |
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Execution Date | | Company | | Size of Facility | | Draw Rate of LIBOR plus (2) | | Financial Covenant Limit on Debt for Borrowed Money to Capital Ratio | | Debt for Borrowed Money to Capital Ratio as of June 30, 2017 (3) | | Termination Date (5) |
| | | | (in millions) | | | | | | | | |
March 3, 2016 | | CenterPoint Energy | | $ | 1,700 |
| (1) | 1.250% | | 65% | (4) | 56.7% | | March 3, 2022 |
March 3, 2016 | | Houston Electric | | 300 |
| | 1.125% | | 65% | (4) | 49.7% | | March 3, 2022 |
March 3, 2016 | | CERC Corp. | | 900 |
| (1) | 1.250% | | 65% | | 37.1% | | March 3, 2022 |
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(1) | Amended on June 16, 2017 to increase the aggregate commitment size as noted above. |
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(2) | Based on current credit ratings. |
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(3) | As defined in the revolving credit facility agreement, excluding Securitization Bonds. |
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(4) | The financial covenant limit will temporarily increase from 65% to 70% if Houston Electric experiences damage from a natural disaster in its service territory and CenterPoint Energy certifies to the administrative agent that Houston Electric has incurred system restoration costs reasonably likely to exceed $100 million in a consecutive twelve-month period, all or part of which Houston Electric intends to seek to recover through securitization financing. Such temporary increase in the financial covenant would be in effect from the date CenterPoint Energy delivers its certification until the earliest to occur of (i) the completion of the securitization financing, (ii) the first anniversary of CenterPoint Energy’s certification or (iii) the revocation of such certification. |
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(5) | Amended on June 16, 2017 to extend the termination date as noted above. |
CenterPoint Energy, Houston Electric and CERC Corp. were in compliance with all financial debt covenants as of June 30, 2017.